Companies

4 methane blocks: ONGC to farm out operating interests

Pratim Ranjan Bose Kolkata | Updated on March 12, 2018 Published on June 20, 2012

ongc

More than six months since it has received expression of interests (EoI) from private operators, ONGC now proposes to farm out operating interests in four coal-bed methane assets.

According to sources, the proposal was placed during the E&P major’s last board meeting.

Sources told Business Line that though the issue was discussed, the board could not arrive at a decision, as the Government nominee raised questions on selection of private operators who should be farmed in.

Of the four blocks, Jharia and Ranigunj (North) were awarded to ONGC on nomination basis in 2003. Bokaro and North Karanpura were awarded during CBM Policy-I in 2002.

Operating interest

As in November 2011, the oil and gas major received four EoIs to pick up equity stake and help ONGC in monetising the assets. Among the interested parties are: Great Eastern Energy Corporation (GEECL); Australia-headquartered Dart Energy (formerly Arrow); Essar Oil; and a consortium of Jindal Steel and Deep Industries.

Available information suggests that ONGC now proposes to divest upto 35 per cent operating interest in these blocks. The PSU major, at present, holds 90 per cent operating interest in both Ranigunj and Jharia, and 80 per cent each in Bokaro and North Karanpura.

Dry run

So far the public sector major produced minuscule quantities of gas from a single well in Jharia-Parbatpur at the cost of a $200 (approximately Rs 1,100 crore in today’s exchange rate) development plan launched in 2007.

Though large quantities of in-place reserves of CBM were also identified in Bokaro, the field is yet to be developed.

In comparison, the New Delhi-headquartered GEECL has began commercial production from the Ranigunj (South) nomination block in West Bengal as early as in 2007. Essar Oil, too, started production from Ranigunj (East).

Dart, the biggest of the four, has more than 50 CBM and shale gas assets in India, Australia, China, Indonesia, the United Kingdom, Poland, Germany and Belgium. The Australia headquartered company also has a technical co-operation tie-up with ONGC.

Published on June 20, 2012
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